Low & Stable Rate of Inflation

Inflation: Crash Course 

What is inflation?

A persistent increase in the average price level in the economy, usually measured through the calculation of a consumer price index (CPI).

Inflation island: an introduction: 

Explore the different areas of Inflation Island, see how people react to inflation and deflation, and how the scenery changes. You can also test your knowledge and try to identify the different inflation scenarios.

The Island’s cinema features videos and photos showing how inflation and deflation have affected various countries over the years. Follow the link below. 

ECB and the Eurosystem explained in 3 min:

Who takes care of the euro? What is inflation ? Why is price stability important for you?

Find the answers to these questions and more in this three-minute introduction to the ECB and the Eurosystem’s role and tasks.

Take a look at ‘Price Stability’ and how it is measured: 

Consumer Price Index – CPI

A measure of the cost of living for a typical household; it compares the value of a basket of goods and services in one year with the value of the same basket in a base year. Inflation (and deflation) are measured as a percentage change in the value of the basket from one year to another.

Core inflation – a measure of inflation that factors out the changes in the prices of products that tend to experience volatile price swings, such as food and energy prices. This gives policy makers a better indication of long term changes in the price level.

Weighted price index – an approach to calculating the change in the price level by giving a weight to each item according to its importance in the consumers’ budgets.

Cost push and demand pull inflation by ACDCLeadership

What is deflation?

A persistent fall in the average level of prices in the economy.


Test yourself on low and stable rate of inflation: